The shipbreaking market in India
has turned distinctly bullish in the New Year amidst rising steel prices and a
dearth of available ships. Recyclers are looking for junk ships as increasing
freight rates force owners to delay scrapping.
In general, 5,000-10,000 ldt
units are becoming the preferred range of choice in the world’s largest ship
cemetery in Alang due to their lower overall cutting times, shifting the steel
off yards and arranging for the import of new units.
“The problem is that freight
rates for most sectors (other than perhaps containers) remain firm and the
number of available candidates has slowed markedly from the same period last
year,” said the Dubai-based GMS, the world’s biggest cash buyer of recycled
ships.
“Nevertheless, 2014 is still
expected to be a bumper year. Last year saw almost 1,200 vessels scrapped; and
whilst 2014 might not emulate that, a huge number of over-aged vessels with
SS/DDs due remain and newbuilding orders continue to deliver and outbalance the
global fleet size.”
Bearing in mind the extreme
fluctuations on both currency and steel prices in India during 2013, end buyers
prefer not to hold large, expensive inventories on their plots for too long. As
a result, capacity too remained encouraging as almost half of all yards remain
empty, with local recyclers abstaining from taking vessels altogether.
Average prices in India rose to
$415 per ldt for bulk carriers and to $445 per ldt for tankers. Prices were $5
per ldt cheaper in Bangladesh for both categories, while Pakistani offers were
a further $5 per ldt behind.
The sole market sale for the week
concerned the older, 5,335 ldt Japanese cement carrier Fujisan Maru, which
fetched an impressive $441 per ldt. The smaller ldt would have drawn in plenty
of buyers along with the highly valued range of equipment, including cement
processing plant, contributing to the decent price on show.
Pakistan found it difficult on
the whole to compete with their Indian and Bangladeshi counterparts. This may
be due to a lack of their favourite larger-ldt tanker candidates, but at
present, end-buyers are lacking the initiative or aggression to compete on
market tonnage.
Finally, China has been seeking
to acquire vessels from the international market once again in the build-up to
Chinese New Year holidays at the end of January. However, with a difference of
almost $100 per ldt with India -- $95 per ldt cheaper than India on tankers and
$75 per ldt behind on bulkers – the Chinese are unable to compete.
“It would be difficult to
persuade owners not to make the journey across (for vessels positioned in the
Far East) or for cash buyers to take vessels ‘as is’ with an intention for a
final voyage to the Indian sub continent,” GMS remarked.
Source: sea trade global. 17
January 2014
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